Leerink Partners trimmed its price target for Moderna to $17.00 from $18.00 while keeping an Underperform rating following the announcement of a global commercialization tie-up between Moderna and Italian pharmaceutical group Recordati for mRNA-3927, Moderna's candidate for propionic acidemia (PA).
The revised target is materially lower than Moderna's most recent trading level of $46.86 and represents the bottom end of the range of analyst projections, which extend from $17 to $135 according to available analyst data.
Under the terms disclosed by the companies, Moderna retains responsibility for clinical development and manufacturing for mRNA-3927, a program currently in Phase 3. Recordati has agreed to make a $50 million upfront payment to Moderna. In addition to that payment, Moderna is eligible to receive up to $110 million in near-term development and regulatory milestones, along with further commercial and sales milestones and tiered royalties on net sales.
Leerink's financial assumptions include a 60% probability of success for the mRNA-3927 program and a 15% royalty rate on potential future sales. The firm also assumes a commercial launch in 2027. Those inputs were cited by Leerink as drivers in the decision to reduce the firm's price target on Moderna.
Separately, the market has seen differing analyst reactions. Bernstein SocGen Group raised its own price objective for Moderna to $35 and retained a Market Perform rating, pointing to an improvement in Moderna's recent financial performance and a return to meeting or exceeding expectations. Bernstein's commentary also noted that it remains cautious pending additional oncology data and continued attention to legal matters.
On the legal front, Arbutus Biopharma Corporation experienced a reversal at the European Patent Office, which revoked one of Arbutus's key patents after opposition from affiliates of Moderna and Merck. That decision overturned prior rulings that had sustained an amended version of the patent.
Taken together, these developments illustrate a busy stretch for Moderna as it actively pursues commercial collaborations while navigating litigation and patent disputes. The Recordati collaboration provides upfront and milestone payments and establishes royalty terms, but analyst valuation adjustments reflect conservative probabilities and royalty assumptions as well as timing expectations for commercialization.
Investors and market participants will likely watch progress in the Phase 3 program and any updates on regulatory milestones, milestone payments and legal outcomes closely, given their potential to influence Moderna's future commercial prospects and valuation metrics.
Summary
Leerink Partners cut its Moderna price target to $17 and kept an Underperform rating after Moderna and Recordati announced a commercialization partnership for mRNA-3927. The deal includes a $50 million upfront payment to Moderna and up to $110 million in additional development and regulatory milestones plus tiered royalties. Leerink's assumptions - a 60% success probability, 15% royalties and a 2027 launch - underpinned the lower target. Other analysts have reacted differently, with Bernstein SocGen raising its target to $35 while maintaining a Market Perform rating. Separately, the European Patent Office revoked a key Arbutus patent following opposition from affiliates of Moderna and Merck.
Key points
- Leerink cut Moderna's price target to $17 and kept an Underperform rating, citing deal terms and program assumptions.
- Moderna will receive $50 million upfront from Recordati and is eligible for up to $110 million in nearby development and regulatory milestones, plus tiered royalties on net sales.
- Analyst projections for Moderna span a wide range, from $17 to $135, while another firm, Bernstein SocGen Group, raised its target to $35 but retained a Market Perform rating.
Risks and uncertainties
- Clinical and regulatory risk - The Phase 3 program for mRNA-3927 must succeed and clear regulatory hurdles before commercial revenue can be realized; this directly affects biotech and healthcare market valuations.
- Legal and intellectual property risk - The European Patent Office's revocation of an Arbutus patent after opposition involving Moderna affiliates highlights ongoing patent disputes that could influence competitive dynamics in the pharmaceutical sector.
- Commercialization timing and royalty assumptions - Leerink's valuation relies on a 2027 launch assumption and a 15% royalty rate; deviations in timing or royalty outcomes would alter projected value and investor expectations in the healthcare and biotech sectors.